232-Unit Buy Is Conti's First in '09

The property at 8405 E La Prada Dr. has already been renamed Villa Bonita Apartments, and Conti Organization principal Stewart Hsu tells GlobeSt.com renovations have begun. "The price and location were perfect for our strategic plan," he explains. "It's next to Eastfield College, which we like."

Another appealing factor is that the property has the worst reputation in the neighborhood. "Those are the challenges we like," Hsu says. "It gives us more room to improve it and make it better. We can't change the neighborhood, but we can change the property."

The asset, which was built in 1969, is situated on 14 acres. The complex offers one-, two- and three-bedroom units ranging from 644 square feet to 1,000 square feet. Rents are between $600 and $850, with occupancy 76%. Transwestern's Dallas office brokered the transaction between Conti Organization and the lender.

Conti Organization, headed by Carlos Vaz, entered the Dallas-Fort Worth market a little more than a year ago with a 351-unit buy and plans to own a 2,000-unit portfolio of area properties by year-end. Hsu acknowledges the market put a bit of a crimp in those goals; the company ended up with around 1,650 units in 2008.

This year's plans are more ambitious. "Our 2009 goal is to acquire around 10,000 units, all in Texas," Hsu says. He explains that Conti is being aided by an economy which is forcing a lot of multifamily product into receivership. Hsu says Conti's strong closing record means good relationships with the lenders that are stuck with the assets. But the company isn't looking for any old bankrupt property.

"We buy based on NOI and at prices that make sense based on good, old-fashioned numbers," Hsu says. "We're not in this to speculate, but we want a reasonable level of income, based on age, condition and location." Though Conti Organization is targeting the Dallas-Fort Worth area right now, Hsu says the company is also looking for likely properties in Houston.